Orders of the General Court of 2 October 2026 in Ber v Council T-640/25 and Shelkov v Council T-655/25
Introduction
In two orders dated 2 October 2026, the General Court of the European Union in Cases T-640/25, Ber v Council, and T-655/25, Shelkov v Council, ruled on actions seeking annulment of EU sanctions provisions governing investor-State dispute settlement proceedings and the recognition and enforcement of related arbitral awards.
The Court rejected the challenges to the CFSP decision in part for lack of jurisdiction and dismissed the remainder of the actions as inadmissible. The two orders apply the same reasoning and reach the same operative result.
Facts and procedural background
Both applicants are Russian nationals whose names had never been placed on the EU lists of persons and entities subject to restrictive measures. They owned investments held, settled, and processed by the Russian National Settlement Depository through Euroclear Bank in Belgium.
The Council listed the Russian National Settlement Depository on 3 June 2022. The listing froze its euro-denominated accounts and prevented transactions through Euroclear and Clearstream. Investors who were not themselves listed could therefore no longer transfer or redeem securities held through the depository or receive income from them. The orders describe this as an indirect freezing of those investors’ funds.
On 18 July 2025, the Council adopted Decision (CFSP) 2025/1495 and Regulation (EU) 2025/1494. The challenged provisions were designed to prevent the recognition, implementation, or enforcement of arbitral awards against Member States in investor-State dispute settlement proceedings concerning restrictive measures imposed under Decisions 2014/512/CFSP or 2014/145/CFSP, or Regulations 833/2014 or 269/2014. They also require Member States to raise available objections to recognition and enforcement and permit recovery of direct and indirect damage, including legal costs, resulting from the relevant proceedings.
On 3 September 2025, each applicant served a notice of dispute on Belgium under Article 10(1) of the 1989 investment treaty between Belgium and Luxembourg, on one side, and the Soviet Union, on the other. Under the procedure described in the orders, arbitration could follow if the parties did not settle the dispute within six months.
Each applicant then brought an action under Article 263 TFEU seeking annulment, insofar as the provisions concerned him, of Article 1(15) and (16) of Decision 2025/1495 and Article 1(18) to (20) of Regulation 2025/1494. The Council raised lack of jurisdiction and inadmissibility by separate plea. Spain, the European Commission, and the High Representative of the Union for Foreign Affairs and Security Policy applied to intervene in support of the Council.
Legal considerations
General Court jurisdiction
The Council argued that the Court lacked jurisdiction to review Decision 2025/1495 because the decision was adopted under Article 29 TEU within the common foreign and security policy and laid down rules of general application rather than measures directed at named persons or entities.
The applicants answered that the relevant concept of restrictive measures should turn on the legal effects of the measure, not on whether the decision formally named its addressees. They maintained that the provisions adversely affected a defined class of Russian and Belarusian investors and connected persons. They also argued that the provisions belonged to the common commercial policy and should have been adopted under Article 207 TFEU or another FEU Treaty legal basis.
The Court recalled that it normally has no jurisdiction over CFSP provisions or acts adopted under them. Article 275 TFEU nevertheless permits review of compliance with Article 40 TEU and review of CFSP decisions that impose restrictive measures against natural or legal persons, subject to the conditions in Article 263 TFEU.
The challenged provisions of Decision 2025/1495 did not fall within the latter exception. They applied by reference to objective criteria, did not name either applicant, and were measures of general application. Limiting the claim to the extent that the provisions concerned an applicant did not change their legal nature. The provisions were also directly related to political or strategic choices within the CFSP because they formed an inseparable part of the EU restrictive-measures regime concerning Russia and Ukraine.
The Court therefore lacked jurisdiction over the challenge to Article 1(15) and (16) of Decision 2025/1495, except insofar as the applicants sought review of compliance with Article 40 TEU. By contrast, the Court confirmed that its jurisdiction was not limited in relation to Regulation 2025/1494, which was adopted under Article 215 TFEU and gave effect to the CFSP decision.
Standing under Article 263 TFEU
Because the contested provisions were not addressed to the applicants, each had to show either that the provisions were of direct and individual concern to him or that they were regulatory acts of direct concern that did not entail implementing measures.
The applicants said that they belonged to a closed group of unlisted Russian investors whose assets had already been placed through the Russian National Settlement Depository within EU financial infrastructure. They also relied on the notices of dispute, which they said gave them the specific status of investors already party to a dispute under the investment treaty. Finally, they contended that the allegedly incorrect legal basis of Regulation 2025/1494 placed them in a position comparable to the addressee of an individual decision.
The Court found no individual concern. The provisions established a defence against recognition and enforcement of arbitral awards arising from proceedings capable of undermining EU restrictive measures. They applied to objectively defined situations and to categories of persons described in general and abstract terms. Investors who had already placed investments through the depository were not a group whose number or identity could be determined with the required precision. Investors who had also notified an intention to use the investment treaty were only a subset of an unquantified group. The allegation that the regulation had been adopted on the wrong legal basis did not distinguish either applicant from other affected persons.
The Court accepted that Regulation 2025/1494 was a regulatory act because it was a non-legislative act of general application adopted under Article 215 TFEU. It nevertheless held that all three parts of the challenged regime entailed implementing measures.
First, an arbitral award could not be enforced by itself. A national court would have to decide an application for recognition or enforcement, and a refusal based on the EU prohibition would be a separate intermediate measure. Second, the Member State’s obligation to object presupposed enforcement proceedings, procedural intervention by the Member State, and a ruling by the national court. Third, recovery of damage and legal costs required a judicial decision or an administrative decision open to judicial review.
The Court added that the applicants could challenge the legality of the EU provisions before the national court dealing with those implementing measures. The national court could then request a preliminary ruling under Article 267 TFEU. As a result, the applicants could not rely on the third limb of the fourth paragraph of Article 263 TFEU.
Outcome
In each case, the General Court dismissed the action in part for lack of jurisdiction and in part as inadmissible. It held that there was no longer any need to rule on the applications to intervene. Each applicant was ordered to bear his own costs and those incurred by the Council. Spain, the Commission, and the High Representative were ordered to bear their own costs relating to their respective applications to intervene.
Related kdb legal coverage
The earlier kdb.legal article Sanctions-Related Arbitration Restrictions Challenged Before EU Courts describes the filing of the parallel actions and the provisions challenged in them.
KDB.legal Koch Boës assists clients in all kinds of sanction related disputes (arbitration and litigation).
